SEYMOUR WHYTE ANNOUNCES ACQUISITION AND EXPANSION
Written on the 19 February 2014
INFRASTRUCTURE engineering and construction company Seymour Whyte Ltd (ASX: SWL) is growing in size and expanding its geographical footprint, this week announcing an acquisition of a privately owned civil construction business and an award of $62 million additional Queensland works.
The company will acquire underground pipe and service installations business Rob Carr Pty Ltd (RCPL) for $27.5 million in cash and the issue of 9.6 million new SWL shares by mid-March.
The acquisition will provide greater financial capacity to facilitate SWL’s expansion plans in the transport, resources and utilities sectors.
It is expected to open up new projects and sectors across additional geographic regions in Queensland, New South Wales and Western Australia, previously unchartered by SWL.
SWL managing director and CEO David McAdam (pictured) says the company looked at more than 50 acquisition targets before deciding on RCPL, which has a track record of strong growth and revenue of $48.4 million for financial year 2013.
“This will be Seymour Whyte’s first acquisition so extensive due diligence was conducted,” he says.
“Rob Carr was selected because it’s an exciting business that provides a range of new growth opportunities and offers a strong alignment of operating cultures and professional competencies.”
SWL has forecast its contestable market for the current capabilities of RCPL in the water and power sector at approximately $4 billion through to financial year 2018.
On the more local front, SWL will partner with Parsons Brinckerhoff Australia to design and construct the Smith Street / Olsen Avenue Interchange Project in Southport over the next 18 months, in preparation for the 2018 Commonwealth Games.
The project is part of an award of $62 million worth of works in Queensland, including two flood recovery projects and a highway rectification.
McAdam says the awarded projects will underpin SWL’s forecasted consolidated revenue of $320 million for financial year 2014, which was revised upwards following the RCPL announcement.
He also says the Commonwealth Games catalyst infrastructure on Smith Street / Olsen Avenue will mark a collaborative first for SWL and also a potential industry landmark.
“The joint venture delivery model takes our team’s commitment beyond the traditional designer-constructor relationship,” he says. “It may be the first time in the civil construction industry that a true joint venture has been developed with the design partner, further enhancing the benefits to the project, our client and the design and construction team.”
SWL currently has more than 230 employees in its Queensland and New South Wales offices, with this number set to grow in light of the RCPL acquisition.
SWL is trading up 5.59 per cent today at $1.51 a unit.